Merging Railway budget into Union budget - Pros and Cons

Merging Railway budget into Union budget - Pros and Cons

Merging Railway budget into Union budget - Pros and Cons

After 92 years of seeing them separately, the next year will witness Railway budget merged into Union budget. This move is being lauded for it will be beneficial for the economy at large and there will be positive influence in the development in railways.

During the British reign, having a separate Railway budget made sense because a larger part of the country’s GDP depended on railway revenue. The tradition of having the budgets separately continued when India gained freedom even though the revenue from railway continued to go lower than most of the organizations in the public and private sector.


1. The scores: During the British rule Railways took up to 85 percent of the yearly budget while now it has gone down to about 15 percent only. Having separate railway budget stopped making sense long ago but the old tradition was not done away with. Scrapping the old for the renewed and better is always a positive change to look upon.

2. Better policies: Now that the Railway budget will be introduced along with the union budget, there will be less wastage of time when a new policy is to be initiated and implemented. Keeping them separate resulted in a lot of drawbacks and hindrances that had to be faced by the railway ministry before it could decide upon a solution.

3. Party politics: Minority parties fighting to meet their intentions and ministers of certain states arguing new railways and trains for their region has always been known to result in an everlasting brawl. There will be less of political pressure on the Railway budget and the centre will have the ultimate hold of the decision making.

4. Goodbye to annual dividend: When Rail budget had to be introduced separately, the railways needed to pay an annual dividend to render its budgetary support to the government. The railways will be free of this now and the same fund could now be used in better ways for development the conditions of Indian railways.

5. The huge loss: Our railways are running on loss. There are lesser funds for development plans and most of them are wasted in wrongful manner when there emerges a demand from the regional MLA who promised new trains and stoppages for their location during the time of election. When it goes into the hands of finance ministry, it would mean and absolute end to this and a more commercialized distribution of resources.


1. The rise and fall: Henceforth, the distribution and allocation of funds to various departments will all go under the finance ministry, which will take decisions according to rise and fall of budget. A fall in the annual budget will mean a similar cut in the railway and other budgets. This will be something unusual for the railways and they might not react supportively to that.

2. Conditions of government departments: The depleting conditions of the various departments under the government have always been prominent. There is lesser attention paid to the responsibilities and everyone is busy sorting out their own means. Railways might see drastic disadvantage if the merging doesn’t reap the desired result.

3. Goodbye to privatization: There have previously been talks of privatization of Indian railways in order to improve and develop them with world class facilities and cleanliness. It was not well received earlier and after the merging, there will a complete end to any future chances of privatization. At the efficient hands of government employees, nothing big could be expected.

4. Loss for the railways: We know how much our parties love making promises and then reducing price to earn the favor of the voters. Not in their wildest dreams would they want to hike the railway prices and lose the vote bank that flows from commuters. Lesser hikes in price might pose loss for the railways department.

There have been mismanagement of the highest order in Indian railways and if there are chances of seeing it improve, merging it with the Union budget is just the solution that could help. The falling revenue and more projects for new trains and stoppages have been a difficult project for the railway ministry which took the right step by merging the two budgets.
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  • RE: Merging Railway budget into Union budget - Pros and Cons -Madhuri (08/07/17)
  • Giving cons in such a way is very anti governmental which can not be encouraged. Now a days we can't at least its tough to see anti corruption country and ruling. So, we should at least be happy that we r being some what beneficial because of government. Coming to cons many other can be given like as state government role there might be hindrances in regional railway developments and new lines to backward areas and if we include current issues there was no compensation given to railways on running trains in non- profitable lines ( happy thing is now PMO has ordered to give the compensation). Every new initiative has cons the only thing is with better implementation and way forwards we can overcome them..
  • RE: Merging Railway budget into Union budget - Pros and Cons -kruti (09/23/16)
  • I agree with the pros. however, if the cons are written for competitive exams like UPSC mains then I am afraid it is not at all according to the standard. For competitive exams answers, we can not blame officials or directly claim that the officials are corrupted and the politicians are invariably cheaters. I am sure there is a better way to present the cons. we have to be very diplomatic while writing answers. thank you.